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3 Overrated Stocks We’re Skeptical Of

THR Cover Image

The stocks featured in this article have all approached their 52-week highs. When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.

However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. All that said, here are three stocks getting more buzz than they deserve and some you should buy instead.

Thermon (THR)

One-Month Return: +3.6%

Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.

Why Is THR Not Exciting?

  1. Sales trends were unexciting over the last two years as its 3.5% annual growth was below the typical industrials company
  2. Anticipated sales growth of 4% for the next year implies demand will be shaky
  3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.6% annually

Thermon’s stock price of $40.95 implies a valuation ratio of 19.8x forward P/E. If you’re considering THR for your portfolio, see our FREE research report to learn more.

Wintrust Financial (WTFC)

One-Month Return: +1.3%

Founded in 1991 as a community-focused alternative to big banks in the Chicago area, Wintrust Financial (NASDAQGS:WTFC) operates community banks in the Chicago area and provides specialty finance services including insurance premium financing and wealth management.

Why Are We Wary of WTFC?

  1. Sales trends were unexciting over the last two years as its 8.2% annual growth was below the typical banking company
  2. Annual earnings per share growth of 6.1% underperformed its revenue over the last two years, showing its incremental sales were less profitable
  3. Low interest coverage ratio indicates the company may struggle to service its debt obligations if operational performance deteriorates

Wintrust Financial is trading at $143.13 per share, or 1.4x forward P/B. Check out our free in-depth research report to learn more about why WTFC doesn’t pass our bar.

TriCo Bancshares (TCBK)

One-Month Return: -3.8%

Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ: TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.

Why Does TCBK Fall Short?

  1. Annual net interest income growth of 6% over the last five years was below our standards for the banking sector
  2. Net interest margin shrank by 17 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive
  3. Sales were less profitable over the last two years as its earnings per share fell by 4.2% annually, worse than its revenue declines

At $48.09 per share, TriCo Bancshares trades at 1.2x forward P/B. Read our free research report to see why you should think twice about including TCBK in your portfolio.

Stocks We Like More

Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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